Growth & Justice Blog

All of our kids will be in the minority, and very soon

Plain facts: By 2015, in just three years, white youth in the United States will  no longer comprise a majority, and then all of our kids will  be members of a minority group. The Star Tribune and other Minnesota media was abuzz last week confirming this transition.   In 2011, for the first time in our nation's history, more than 50 percent of our newborns were non-white or Hispanic and in Minnesota more than 30 percent of our kids under 5 are kids of color.

This will be good, for Minnesota must become a world community to compete in an age of globalization.  But the more important corresponding reality is that our white population and our education systems must adapt faster to changing demographic realities for this state and nation to thrive.   That was the key message delivered by Georgetown University Law Professor Sheryll Cashin  during a recent forum in Minneapolis.

Sheryll Cashin, Georgetown University Law Professor

“The Latino population grew at a rate 40 times that of the white population during the last decade, and these are people born here; not immigrants. Growth in the Asian population is high as well,” Cashin said during the 15^th Annual Julian Parker Lecture held earlier this month at the Minneapolis campus of the University of St. Thomas.

 Cashin, who writes extensively about issues of race and inequality, said that social psychology holds that most people harbor biases, and people who are the most isolated tend to believe the worst stereotypes.  This can be dangerous because separation perpetuates stereotypes of people perceived as “the other.''  

“It is no secret that American public schools are rapidly resegregating,” Cashin said. “Blacks and Latinos have become more segregated than ever in the last 30 years.”  Economic segregation is rising as well, she noted, noting that in 1970, 65 percent of the people in this country were middle class while today, 44 percent are middle class.

The better news is that some areas of the nation have been able to counter this segregation and the widening gap in various measures of  school success rates, to the benefit of all, Cashin said.  She cited Montgomery County, Maryland, where longtime zoning laws required 10- to 15-percent affordable units in wealthier communities.  Now, Montgomery County has emerged as a leader in closing the achievement gap between low income and affluent children, she said.   (See Growth & Justice policy brief on Montgomery County.)

Referring to different perceptions about race and inequality, Cashin said whites frequently view racism through its more blatant and outrageous history, in the context of laws and policies of the previous century that more brutally and intentionally held certain groups back.  So, whites are more likely to see progress around the issue. People of color, however, seek a future of true equality, which they see as quite distant, Cashin said.  

Although whites and people of color typically disagree about the subject of race and addressing disparities, Cashin urged unity and called for establishing multicultural coalitions that “narrow rather than widen gaps” between people.

 Louis Porter II

(Note from Growth and Justice President Dane Smith:  Louis  Porter II is a new Policy Fellow for Growth & Justice.   He's a communications teacher at the University of Minnesota, a former journalist for the St. Paul Pioneer Press, and he holds a doctorate in education.)

 

 

Five Reasons For Optimism in 2012

Five reasons, small and grand, for optimism in 2012:

• Even Katherine Kersten is hopeful. I like much of what the conservative firebrand said in her latest Star Tribune column about the "debilitating hail" of news that emphasizes "crisis and decline" and how American success has been founded on the "virtue of hope." This was a nice break from her relentless negativity about any and all things public and progressive about our nation and state. She missed some points about how Americans were always hopeful for justice and greater equality as well as freedom and business growth. But a little ray of sunshine from KK is wonderfully refreshing.
• A good friend of mine may have turned the corner in treatment for a nasty disease. A big reason health care costs keep going up is that people live longer, and thus more people need more medicine and more doctors during more of their lives. I'll got out on a limb and declare that people living longer is a good thing. Another reason for rising health care costs and increasing under-insurance is expensive financial administrative costs in the health sector. Growth & Justice will produce a study early this year that takes a look a the costs and benefits of a universal and unified system of health care for Minnesota.
• The American people are hopeful, amazingly. Although most Americans overwhelmingly view 2011 as a bad year, a recent Associated Press poll found that almost 80 percent of Americans are optimistic about the future of their own families in 2012, and more than 60 percent are optimistic about 2012 for the country as a whole. The polls suggests that Democrats are optimistic than their candidate will be re-elected and Republicans are optimistic than they will win, but hey, it's all optimism.
• Things actually are getting better for humankind as a whole. As Harvard professor Steven Pinker recounts in his convincing and exhaustive new book, "The Better Angels of Our Nature" (reviewed here), the current era is the safest and least violent in recent human history, and living conditions are improving everywhere. I like his theory about human progress being part of the “civilizing process," a term he borrows from the sociologist Norbert Elias, who attributes it to the consolidation of the power of the state above feudal loyalties, and to the effect of the spread of commerce. In other words: a happy synthesis of capitalism and good strong democratic governments.
• Finally, in Minnesota, we are well governed and our business leadership is better than elsewhere. Our public sector and our private sector are fundamentally sound, despite gridlock in Washington and depredations on Wall Street. I like what a recent Star Tribune editorial had to say at year's end about Gov. Mark Dayton taking us in the right direction, and the state Senate is now under the leadership of a Republican who is openly moderate.

The economic collapse of late 2008 turned out to be as big a hole as we thought and there is lots of room for improvement all around, from redesigning our governments to restoring our public investments in education and public infrastructure to reducing racial and income inequality. Lots of things can and will go wrong. But there's no future in pessimism. See the doughnut, not the hole.

--Dane Smith 

Governments innovate and improve all the time, and sometimes it makes the news

No news is good news, they say.  And in the news business, good news too often is NOT news, or sensational enough to display prominently.  But one distinctive cover page of the Star Tribune’s metro section earlier this month provided a refreshing exception.  The story at the top of the page revealed how nursing homes in the Ecumen chain are improving the quality of their residents’ lives by replacing sedative drugs with massage, music, games, aromatherapy, and other alternatives for pain and anxiety control, in a very encouraging project mostly  funded by a state government grant.  Another article on the page and a large photo described how the Burnsville Police Department is using body cameras instead of more expensive dashboard cameras,  to more quickly settle claims of excessive force and other disputes.  And a third article on the page explained how the city of North St. Paul was planning to save money and improve services by turning its recreational programs over to the neighboring city of Maplewood.  Our new governor and our new Legislature will be leaving no stones unturned in their search for better ways for our governments to do things and to save money.  It’s important to be aware that Minnesota already is blessed with a culture of good government, conscientious public employees and leaders, and a tradition of innovation in the public sector.  Mostly unheralded efforts like the above are occurring every day across the state.  All of us, as the actual bosses of our governments, need to be part of this.  You can add your two cents by contributing your thoughts to the Common Cents project , sponsored by the Citizens League and the Bush Foundation.  Check out their website for an interesting and robust discussion of the further things Minnesota can do with long-term care, with technology improvements and with consolidation and collaboration between governments.

Dane Smith

Michael O'Keefe with budget wisdom

Michael O'Keefe was one of the standouts in  a highly respected state cabinet that came together to help neophyte Gov. Jesse Ventura in 1999, and O'Keefe served ably as commissioner of the Department of Human Services, one of the state's largest and most complex agencies.   He's also had a distinguished career as a foundation CEO  (McKnight) and a college president (Minneapolis College of Art and Design), and he has degrees in mathematics and physics.   So when he talks about state budget crisis realities, one really should pay attention.   Here are some of the standout excerpts from his recent interview with the Civic Caucus on the "Hard Realities of Minnesota's Budget Situation."

•  Address the problem with every tool in sight, but do not dig a deeper hole--O'Keefe described how he was in government for "good years," when they had extra money to spend. "Then we hit a bad year. The budget was good before the Legislature got a hold of it. Governor Ventura had actually put together a very reasonable plan that included some taxes and some cuts, and drew down some  state reserves with a strategy to replace them.
• "Offset medical costs by accepting federal Medicaid assistance, and find efficiencies--In the area of health, O'Keefe advocates taking the federal Medicaid money-over $1billion-"because one of our goals of a state is to have a safety net." The state really screwed up when it cut general assistance medical care, he said. Now minor conditions become chronic or more serious and people will show up at emergency rooms that cost someone--the state, the county, insured people-- much more than if they had received preventative care.
• The health care system will need a crisis to change--He has concerns about the system of care, and its methods of payment. "A third-party-payer marketplace is never going to work unless you have substantial restructuring. We have a system that rewards doctors on volume, on throughput," and on the cleverness of their support staff to classify what it is that went on in the exam room. He described a doctor who told him that whenever he performs a service he cuts and pastes a description for the service directly out of the Medicare guidebook, which guarantees he'll be reimbursed. Instead, O'Keefe said, the state needs more systems like Mayo where doctors are paid salaries.
  
• The state may not need two public post-secondary systems--A participant asked whether the state government really needs two higher education systems. "I don't think so," O'Keefe responded. "Take a look at the administrative over-structure-it's huge." O'Keefe described his hope that new leadership at the University and at MNSCU will be willing to engage in a discussion about reducing the aggregate administrative overhead, admitting that it would be enormously unpopular with their constituents but nevertheless needs to be done."
  
• Post-secondary costs are being driven up faster than inflation--Higher education costs have been rising at double the rate of inflation for 25 years, he said, and that's not sustainable. Part of the cost-driver has been on the administrative side, and part because of increased complication caused by increased requirements of the federal government. "But a huge increase has been a market phenomenon driven by students and families: they want more, and they're willing to pay for it."  Expectations have increased. "You can't sell a dorm room with three beds anymore. What students and their families want is an apartment suite with living area, kitchen, laundry etc. And, they're willing to pay for it. Witness private developers who are putting up such style dorms and making them profitable."  O'Keefe recalled many years ago that The George Washington University was considered "middling" in terms of quality. They brought in a consultant whose recommendation was that they double tuition. They increased it by 40 percent in the face of deep concern that  applications would go down; instead they went up by 60 percent. "People were willing to pay more because of the perception of quality implied by the higher tuition."
• Virtual education has significant, widespread potential--To a question about virtual education, O'Keefe said he thinks it has huge potential to bring students rich experiences without having to first bring them together in person. At the college of Art and Design he described a professor who taught via the internet from South Africa. The students were satisfied, he said, with a balance of internet-conferencing, faxing images to each other, and working face-to-face in groups on campus. "I was very surprised; it resulted in a quality experience." Even so, the application of technology has increased costs: "So far when new technologies have been added they haven't reduced costs, as some had promised. I'd argue you have to change the system of teaching for that to happen."

There's substantially more from O'Keefe on the Civic Caucus website,  including a provocative challenge to rethink  whether Minnesota's spending on prisons and lifetime incarceration of sex offenders can be sustained.   We're proud to have Michael on our board of directors at Growth & Justice and as a significant  influence on our policy thinking.

Dane Smith

Post-ACA situation for Minnesota still fuzzy, but getting clearer

Some day,  the acronym "ACA" will be as commonly understood in everyday conversations as the FBI or MnDOT or FEMA.    But there's still a whole lot to learn about the Affordable Care Act, the sweeping federal health-care overhaul that eventually extends coverage to as many as 40 million previously uninsured Americans.

I had the privilege of attending a presentation on the subject this week by one of Minnesota's most respected leaders in the field, Mary Brainerd, CEO of Bloomington-based  Health Partners, and sponsored by KeyStone Search, an executive search firm.   Brainerd also has been a key  leader in the Itasca Project team, a far-sighted group of top business leaders who tackle broad issues affecting Minnesot'a quality of life and economic competitiveness.

Among the key takeaways in Brainerd's presentation:   

• The important principle that everybody is in the pool _ well people and sick people _ "marks a turning point'' toward "solidarity'' in the U.S. system.   The federal reform gets there with individual mandates, need-based subsidies, insurance reforms, state insurance exchanges and expanded Medicaid coverage.
• Although more coverage of an additional 35 million to 40 million Americans by 2019 is the goal, and it might mean lower bottom-line costs for some or many Americans, the price tag for the federal responsibility could be as high as $1 trillion over the decade.    And "there are a lot of elections and budgets between now and then.''   
• Aside from the business of financing health-care equitably and universally, all of us need to tackle the behaviors that threaten our national health.   Obesity rates and diabetes are  becoming epidemic and fewer than 10 percent of Americans really adhere to the obvious and basic behavioral regimen that improves health: fruits and vegetables five times a day, no smoking, moderate alcohol intake, and regular and vigorous exercise.

Brainerd promised on her last PowerPoint slide that in the cause of "Real Health Care Reform,'' she and Health Partners would "advocate for it,'' and "be an example of it.''

Minnesota policy-makers have a lot of work to do between now and January to figure out what legislation, if any, is needed to follow up and complement the federal legislation.    For a primer on Minnesota angle, here's an at-a-glance guide to Minnesota-specific impacts of the Affordable Care Act  and there's more data and information at the federal main page, HealthCare.gov 

Dane Smith

Historian Alan Brinkley on right-wing populism and "fighting back''

Eminent historian Alan Brinkley (Columbia University professor, an authority on 1930s populist movements of the left and the right and the New Deal, also son of legendary TV anchor David Brinkley) was in town this week and offered some timely wisdom at the Humphrey Institute about the conservative populist uprising.

Brinkley is himself a progressive and a voice for "pragmatic liberalism.'' Although an admirer of President Obama and his agenda, Brinkley compared him unfavorably in some respects to Franklin D. Roosevelt, noting that FDR fought back against a right-wing populist revolt to his progressive agenda with passion and "almost incendiary'' rhetoric, sweeping to reelection in 1936. 

Brinkley said Obama has been too cool and passive and there has been "no effective rebuttal to many of the dishonest claims made by opponents of the health-care bill.'' And he suggested that for Obama, this is "not a time to conciliate, it's a time to fight.'' 

I liked his candid repsonse to a question I asked, as to whether progressives should be more clear about the growing economic inequality in the nation, and more honest about growing the public sector to provide more economic security, as insurance against private-sector abuse and failure. Brinkley said "progressives should talk about inequalities and (conservative) policies that have made (inequality) greater... Taxes do have to go up.'' 

But he added: "Nobody wants to be raising taxes and nobody wants to talk about inequality because nobody is sure how to fix it.'' 

— Dane Smith 

Less Government? We Tried That. It's Not Working.

The Star Tribune's front-page story today finds that "less government'' is the overwhelming consensus "vision'' for Republican gubernatorial candidates. Peggy Lee and most Minnesotans want to know: Is that all there is?   

Leaving aside that this mantra sounds more like hard-right, activist-energizing radio talk than inclusive vision casting — and has to be extremely disappointing to hundreds of thousands of moderate and progressive Republican voters — we need some context here.   

The Price of Government, an official state Minnesota Management and Budget measure, shows that we DO have less government over the last decade, ever since the no-new-taxes religion, like some southern invasive species, got a hold on the North Star State. (See page 13 of the PowerPoint presented at the capitol last week by State Economist Tom Stinson and State Demographer Tom Gillaspy).

The bar graphs clearly show that our governments are using about two percentage points less (15.5 percent in 2008 compared to about 17.5 percent through the 1990s) of our personal income share than those governments were spending when the economy was actually doing better. Huge income tax cuts in 1999 and 2000 left us with chronic  budget crises, and the promised payoff in sustained, tide-rising economic growth didn't materialize, either.  

Wealth concentration at the top got worse, bridge and road conditions deteriorated, public school course offerings were cut, and thousands of working low-income folks lost their health care. And our economy is slumping and beginning to underperform the national average on some key indicators.  

We surely could use some more judicious restructuring and redesign of how we do our government work. But the basic things government provides are essential for our shared prosperity and quality of life.  

NOTE: The Price of Government measure is one of the most comprehensive of all the measures we have to describe the size and role of government. It counts state and local government revenues as a percentage of total income and therefore accounts for inflation, population growth and economic growth. It was instituted at the behest and with the approval of business groups in the late 1980s.

— Dane Smith

Minnesota Poll's progressive majority on health care

As a former reporter for the Star Tribune who wrote scores of news stories based on the Minnesota Poll, I am very familiar with the science of polling and its limitations,  and the crucial importance of context.    Here's some important context for the poll results and the headline that declared "Obama's support declines sharply.''   

 A drop in 10 percentage points on job approval, after the "honeymoon" and late in a president's first year,  is typical, but especially if he's mounting the most sweeping social and economic reforms in decades during the most serious recession in a century.    The coroporate bailouts and continuing war in the Middle East have  angered the left, the bailouts and the expansion of a public role in health-care have infuriated the right, everybody's still worried about their personal finances, and still the president's approval rating is about 20 points higher than his predecessor's.

The concerns about health-care transformation undoubtedly are an overriding factor but it appears that the dissatisfaction with Obama's plan comes from many liberal folks who wish he'd gone further.   Although Minnesotans disapprove of his overall "handling" of health care (45 percent to 39 percent),  there is clear approval of the  "public option'' despised by the right-wing critics (51 percent to 37 percent).   Most in the poll  approve a law requiring coverage (54 percent to 37 percent) and a slight plurality (43 percent to 40 percent) actually favor the overall changes being supported by Obama and his congressional allies.   Most important,  perhaps, the poll showed that about 40 percent of Minnesotans are either worried about losing coverage or are currently uninsured.

We've often made the case that there is a sustained majority in Minnesota who favor the moderate-to-progressive position on key economic and tax-budget issues.   These key issues include support for public education, transportation, public health-care, environmental protection and most of the worthwhile vital investments that our governments provide.    This majority also favors  a fairer and reasonably larger tax burden on those at the top of the income scale,  and polls show it opooses an  inflexible "no new taxes'' orthodoxy.

Dane Smith

International study spotlights the health care-small business connection

Credit Lee Egerstrom of MN2020 with finding this study by the Center for Economic and Policy Research that compares U.S. small business employment with that in 20 other rich nations.

By every measure of small business employment, the United States has among the world’s smallest small-business sectors (as a proportion of total national employment). The lower taxes, less stringent regulations, and freer labor markets in the United States, it appears, have not yielded greater small-business employment here than elsewhere.

That's right. Although it's an article of faith in both parties that small businesses fuel America's job creation and innovation, we're worse than an also-ran in the global economy.

The study looked at:

• self-employment (the U.S. has the second lowest share of self-employed workers at 7.2 percent)
• shares of small business employment in manufacturing (only Ireland (9.6 percent) and Luxembourg (8.5 percent) ranked lower than the U.S. (11.1 percent)
• high-tech fields — computer-related services and research and development —where we ranked second- and third-lowest, respectively (Luxembourg spanked us in both categories)
• and lower-tech services (“restaurants, bars, and canteens”; “real estate activities”; and “renting of machinery and equipment etc.”) where we ranked dead last.

One comforting myth is that businesses are started by entrepreneurs with a design for a better mousetrap or maverick employees who wrote a business plan to exploit an opportunity their employer refused to invest in. These start ups will overcome obstacles and grow into healthy, profitable enterprises that provide good jobs and make the world a better place.

The job statistics will tell you that Minnesota’s smallest businesses (with 1-19 employees) account for about one-quarter of all new jobs annually. Even when its job losses are counted, this segment provides a net gain of jobs about equal to the state’s overall private sector job growth.

A lot of these small business simply deliver basic services and provide individuals a way to make a living in an economy that increasingly relies on part time labor and independent contractors. For every long-time mom and pop store or entrepreneur with a dream to build a company, there are several spouses supplementing the household income, displaced executives “consulting” between jobs, and painters, programmers and truck drivers who don’t know who they’ll be working for or what they’ll be making next month.

These may represent "new jobs," but they are hardly an engine of economic growth. Nearly three quarters of "small businesses" in Minnesota do not have employees.

I believe the downsizing and outsourcing by larger corporations is responsible in large part for this “job growth.”

Nearly three quarters of small businesses in Minnesota do not have employees. Most of these business owners will tell you the biggest decision they face is whether to hire some help; most never will. The second biggest is whether to offer "benefits" — which means health care and a 401(k) plan.

By outsourcing more work to small businesses, corporations can effectively buy the services without incurring the obligation to provide benefits. We've seen this gambit occur also in the retail sector, where employers use part-time work as a way of avoiding providing health care and other employee benefits.

The CERP study puts this practice in global perspective. In countries where there's national health care, a real barrier to entrepreneurial growth is removed. People are more likely to start businesses — and hire employees — knowing that health care will not be a cost that constrains their growth.

When I started my business I made an early decision to provide employee benefits that were competitive with what big companies offered — because those were our clients, and we wanted to attract talent that was comparable to what a major corporation would hire. That was the right strategic decision for my business at that time, but I know many start ups and sole proprietors who see health care as a major cost that they can't risk funding.

As Lee Egerstrom says:

Without a universal health care system that moves insurance costs off the backs of doing business, we will continue to thwart entrepreneurial development and we will continue to encourage large manufacturers and service providers to keep out-sourcing and off-shoring work and jobs.

Unless, of course, companies in those more enlightened countries simply take the business away from us.

— Charlie Quimby. Cross-posted from Across the Great Divide.

Hollowing out the public sector affects public safety

Our continuing and increasingly dubious experiment with starving the public sector in Minnesota is producing almost daily reports of questionable budget cuts.   A Star Tribune front-page story on disappearing lifeguards at public beaches is the latest manifestation of our increasingly penurious fiscal policy.    Anti-government conservatives like to claim that much or most of government investment is unnecesssary or superfluous, and that all we really need are military forces, courts and police to protect property.   But it turns out that a relentless ratcheting down of public investment affects public safety in myriad ways:  crumbling bridges, less attention to mesothelioma incidence in northern Minnesota miners, Local Government Aid cuts that force police and emergency service layoffs, hospital reimbursement cuts that hamper emergency rooms in the midst of an ongoing swine flu pandemic, and on and on.    Public safety is a primary responsibility of our entirely legitimate and mostly effective state-and-local government systems.    Most of the things those governments do eventually have something to do with public safety and providing for the "General Welfare," an often overlooked primary goal that is spelled out in the United States Constitution.    And these systems can't be funded without fair and ample tax revenues.

Dane Smith